After receiving many inquiries from readers about an empty piece of land in the heart of the NoHo Arts District, North Hollywood-Toluca Lake Patch went looking for answers to a couple of basic questions:
Who owns the land and what, if anything, is the owner planning to do with it?
Getting answers has been difficult.
The land is located between Weddington Street and Chandler Boulevard, west of Vineland Avenue, and stretches over two large city blocks. The property is bordered by multilevel, multimillion-dollar complexes such as the NoHo Commons, Lofts at NoHo Commons, and the Gallery at NoHo.
Located on the land is the Weddington House, referred to as the "mother house" of North Hollywood and considered one of the oldest standing structures in the San Fernando Valley. The house is a historical structure protected by the city that would have to be moved before any development could take place.
As we tried to determine if the land was going to be developed, we looked into the record of JSM, the development company that has owned the property since 2006.
It has been difficult to find out from JSM’s chief executive officer, Craig Jones, whether the company plans to do anything with the land, or even if it still owns it, because the company’s North Hollywood office is closed, its phone number is disconnected, and the website of all JSM affiliated companies, www.jsmcompanies.com, stopped operating at least a month ago, if not longer. Jones reportedly has left the country for an undisclosed location in Southeast Asia, and public records on his company don’t match what sources have told Patch.
One of JSM's investors, Prudential Financial, declined to say if it held ownership in the land, confirming only that it was involved in litigation over it.
A limited liability company owned by Jones, called JSM NoHo Artwalk, bought the majority of the two city blocks in 2006, according to county records. Another of Jones' companies, JSM Construction, announced plans in 2007 to build a mixed-use development on the site, according to published reports. Most of the warehouses that used to occupy the land were bulldozed. Several small warehouses and a Big Lots store still stand on portions of the blocks that are owned by other parties.
Jones owns or owned many companies under the "JSM" flag—JSM Construction, JSM Management, JSM Capital, and at least a dozen others — that have been major developers in Southern California for the last 15 years.
At least 15 JSM developments in Los Angeles County have been foreclosed upon since 2009. But the county doesn't keep accurate records of foreclosures, only sales, and the company that has been identified by a number of sources as being JSM's main financier of the undeveloped land, Prudential Financial, declined to say if it owned it or had any development plans in the works. John Chartier, a Prudential spokesman, confirmed only that Prudential was involved in litigation over the land, but would not say with whom.
Several sources and business owners in the area around the empty land told Patch that they thought Prudential owned it.
"Prudential owns (the land), because they were the main financiers of the developers," said Guy Weddington-McCreary, who follows the property closely because the Weddington House, built by his great-grandfather, is located there. Weddington-McCreary authored the application with the city in 2007 to have the house named a protected structure.
JSM Management and Jones built numerous housing developments near downtown Santa Monica, with an estimated 1,500 units, as well as other large projects around the county. Several of the properties went into foreclosure, and Prudential was listed as an investor in reports by the Santa Monica Daily Press.
JSM Construction developed the NoHo14 building in the NoHo Arts District, the tallest residential structure in the Valley. It was intended to be condominiums, but in late 2009 Bank of America foreclosed on the building and in 2010 sold it to the Kennedy Wilson company. Units in the NoHo14 building are now rental apartments.
Patch tried unsuccessfully to locate someone with JSM to find out if the company still owns the empty land between Weddington Street and Chandler Boulevard and, if it does, whether it plans to sell or develop it.
JSM Management has offices listed in Santa Monica, but messages that Patch left on its voicemail were not returned. A JSM Capital office is listed at 111 N. Pass Ave. in Burbank. Patch visited the office, located in a small apartment complex. A man who identified himself as "Jim" opened the door but did not allow Patch into the office. He said JSM Capital does not own any land in North Hollywood. He added that JSM Capital is not involved in what JSM Construction does, and that there are many JSM companies. He also said Bank of America foreclosed on all the land that Jones owned in North Hollywood, including the open space along Chandler Boulevard.
When contacted, a Bank of America spokesman said the bank did not own the land.
Patch then ran a title search, which listed JSM as the property owner and Bank of America as a lender on an $80.5 million mortgage that was taken out on Oct. 1, 2009.
Although the man at JSM Capital said the company was not involved with JSM Construction or land in North Hollywood, a lawsuit filed in 2009 (PR/JSM Rivara LLC et al. Vs. Community Redevelopment Agency of the City Of Los Angeles et al.) listed JSM Capital, JSM Construction and JSM NoHo Art Walk as plaintiffs. In the lawsuit, which was dismissed, JSM asked for design guidelines for the North Hollywood redevelopment area to be set aside. (See attached PDF).
JSM Financial Ruin Widespread
Since the housing crisis hit in 2008, Jones' companies have had severe financial difficulties, which have been reported on by local and international news media.
Last year, JSM came under criticism when it failed to build 52 affordable housing units in Santa Monica under an agreement with the city, according to a report by the Santa Monica Daily Press. The article, headlined "Developer skips out on affordable housing," said several JSM properties in Santa Monica that were supposed to have been developed as affordable housing had gone into foreclosure.
The newspaper also reported that Jones had left the country and was living somewhere in Southeast Asia.
Santa Monica city officials acknowledged in the report that they received an inadequate security deposit to guarantee that the affordable units Jones promised would be built. Jones also reportedly did not pay the city $1.1 million that it was promised if the affordable housing was not developed.
JSM also abandoned a major 33-unit development in Pasadena midway through construction in 2009, leaving local residents to complain that the structure had become an eyesore, according to allbusiness.com.
In March of 2010, First-Citizens Bank & Trust Company started foreclosure proceedings against another of Jones' companies, JSM Tramanto, alleging that the company had defaulted on a $14.1 million loan, according to the Palisades Post. The Post also reported that 11 of JSM's properties in Santa Monica had gone into foreclosure.
In 2004, JSM Management and Jones were sued by eight tenants of its buildings in Santa Monica who claimed their security deposit checks were improperly withheld or reduced, according to The Lookout News.
Jones started a company, JSM Indochina, in 2007, which is based in the Cayman Islands, according to the company's website. The company held an initial public offering on the London Stock Exchange's AIM Market, and raised around $220 million for the purpose of investing in real estate in Vietnam and Cambodia. In 2009, Jones and the original board were ousted by an activist shareholder group that claimed Jones had only invested one-third of the sum, despite stating in the public offering that JSM Indochina would invest the entire sum within a year, according to The Telegraph newspaper of London.
JSM Indochina is now selling off its assets, according to asiapropertypublishing.com.
It’s unclear what effect all of these legal matters will have on the undeveloped land at Chandler Boulevard and Weddington Street, and on the Weddington House.
Guy Weddington-McCreary said he had a deal in place several years ago with Prudential and the city's Community Redevelopment Agency to spend $700,000 to move the Weddington House to North Hollywood Park before the land was to be developed.
When contacted, CRA spokesperson David Bloom said "the agency has no current plan to assist in preservation of the Weddington structure" and provided no other information about the land.
"Now everything’s up in the air," Weddington-McCreary said. "Right now the plans are all kind of shattered economically.... There’s no hurry for Prudential now. With the way the economy is, they’re probably going to wait five, six, seven years before they are going to develop the area, or bring in another developer. So that’s what the problem is. But Prudential should do something."